The astonishing success of Lord Hamlyn, who has died of cancer aged 75, owed nothing to the role models usually held up to those entering the publishing industry, nor to the often hypocritical "love of literature" sentiments expressed as a reason for producing books. Paul Hamlyn broke all the rules, largely because he was never particularly aware of them; he realised that books are merchandise, not objects of sacred awe, and that there were many people who would buy them if they became as democratic as toothpaste.

At the time he started, in the late 1940s, the textbook of publishing was Sir Stanley Unwin's The Truth About Publishing, which laid down ground rules, all of them assuming that publishing was a gentlemanly profession where one did not soil one's hands in the marketplace. Hamlyn did just that; at the age of 22, he was selling books from a barrow in Camden Market, London, an exercise that taught him that books can have a sale anywhere - not just through bookshops - always providing the price is low enough and the appearance attractive.

He had an instinct for marketing, a sharp analytical eye and a quick brain. His commercial personality contrasted sharply with that of his scholarly brother, the poet and translator Michael Hamburger,.

Hamlyn started with £500 capital. He realised that the obvious classics sold best, and started to produce his own Books for Pleasure in 1949, printing large editions at a low price that he could sell quickly, and dispensing with most of the overhead calculations that apply to normal publishing. Later, there was Prints for Pleasure in 1960, and Records for Pleasure and Golden Pleasure Books for children in 1961.

He looked for unconventional outlets - general dealers, chain stores, anywhere where crowds shopped. Looking for cheap printers, he struck a deal with the currency-hungry Czechoslovakian government, putting in large orders on credit terms that, with his superb merchandising skills, made his publishing virtually self-financing.

Soon he was monopolising the entire export capacity of the Czechoslovak state printing industry. He expanded rapidly, starting new imprints and, in 1964, sold out the Paul Hamlyn Group (which he later reaquired) for £2.2m. He joined the board of the International Publishing Corporation (IPC), of which he was chairman from 1965-1970. He acquired companies, moved into news services and communications, and spread his interests, always with an eye to what the public would want next. He was co-managing director of News International from 1970-1971.

In 1971, Hamlyn launched the Octopus Publishing Group with £10,000 capital. It became the centrepiece of his imprints, and, in 1987, Reed International paid £530m for the company. A substantial block of his Octopus shares went into the family charity, the Paul Hamlyn Foundation.

Hamlyn was born in Berlin, the son of a German-Jewish paediatrician and a Polish Quaker mother. The family name was Hamburger; his mother's maiden name was Hamburg. Recalling that he was tired of references to sausages, he changed his own name to Hamlyn. After the family's arrival in Britain in 1933, young Paul was raised in St John's Wood, north London, and educated at a Quaker school, St Christopher's, in Letchworth, Hertfordshire. During the second world war, he worked as a Bevin Boy in a south Wales colliery.

Hamlyn was a good mixer and bon viveur, but never too forthcoming about his activities to others, a good listener who usually kept his own counsel. Other publishers often put part of their profits back into slow-selling literary authors, but he preferred not to mix his business life with his charities. He subsidised the performing arts, guaranteed the overdraft of Carmen Callil when she was co-founding the feminist publishing house Virago in the 1970s, funded the provision of artificial limbs in India, and his charitable foundations helped to fund many other educational products and medical research projects.

His numerous honours included the Royal Society of Arts' Albert Medal and a CBE. He became chancellor of Thames Valley University and chairman of the trustees of the Public Policy Centre. He was created a life peer in 1998. He bought a chateau in France that grew wines - and that became a company and business as well.

Hamlyn was a tycoon who never appeared to have set a foot wrong, and was able to keep track of his multiple acquisitions with little apparent effort. He always gave the impression that business was a game, selling to a willing buyer when the opportunity arose, but then unable to sit back on his laurels, returning out of a need to be a player once again.

He is survived by his second wife Helen, and his son and daughter from his first marriage.

Roy Hattersley writes: Although Paul Hamlyn described himself as "on the left of politics", he was never a normal Labour supporter. He was, by nature, a philanthropist, and the party appeared on his list of good causes. If anyone had suggested that he used his money to influence party policy, he would have regarded the idea as no more acceptable than attempting to censor the books in Oxford's Bodleian Library before he gave it £31m. He would have regarded lobbying in Downing Street as disreputable, undignified and boring.

He was an unlikely socialist, not so much because of his wealth but because of his habits. The four houses - Chelsea, the south of France, Paris and Gloucestershire - were, in themselves, no more a bar to radical ideas than his private jet. It was his attitude towards his wealth which sometimes raised eyebrows.

"I have not", he once said, "so many lunches left that I can afford to waste any of them on sandwiches." He took an equally uncomplicated view of philanthropy. "If you have been as lucky as I have, and the sums of money are as enormous as they are, it seems to me unthinkable if some of it didn't go to people who need it."

He gave vast sums to encourage specific projects - most them connected with the arts or education. In 1990, he gave £3,100,000, specifically to be spent on developing Labour's arts policy - without even hinting at the direction which the policy should take. Then, he spent £3,100,000 financing the (independent) National Commission on Education - without even suggesting who the members should be.

Donations to the party came later - first, in 1996, to help publicise the draft manifesto. In the run-up to the 1997 election, he donated more. His donation of £2m last year created a brief media furore. But, when he was made a peer, no-one suggested that his investment had paid off. His immense success as a publisher, as much as his philanthropy, made him a natural candidate for the Lords. And he remained detached, almost aloof, from the government.

Hamlyn had been on the left of politics all his life - describing himself as "hating any form of injustice". But it was not until the "gang of four" founded the Social Democratic party that he began to play if not a prominent, at least a financial part in politics. David Owen described him as "not a politician, but by nature on the side of the underdog."

The instinct made him - at least as far as his charitable work went - a strangely old-fashioned figure, who was prepared to dedicate millions to his own, not very precise, ideas of a better society. Sentimentalists will say that he never forgot the disadvantaged. It might be more true to say that he always had a clear view of financial morality - the duty of the wealthy man to help those who have not enjoyed such good fortune.

Jeremy Isaacs adds: If Paul Hamlyn did well by doing good, he also did good with his wealth. Through the Hamlyn Foundation, he gave vast sums annually to causes he thought deserving. In Mexico, he started a literacy programme. In Britain, and particularly at the Royal Opera House, he used his wealth to bring experience of the performing arts to those who had never before enjoyed them.

The socialist millionaires I have known have always taken the line that what is good enough for them is good enough for anyone. Paul enjoyed theatre, music, opera and ballet. He gave others the chance to decide for themselves whether they might too. More than a decade ago, his wife, Helen, as a birthday present for him, arranged a week of performances at Covent Garden. The audiences, none of whom had ever been before, were there at his expense.

After that, the Hamlyn Foundation, with help from Westminster city council, sponsored annual weeks of such performances at the Royal Opera House, bringing 12,000 people a year - more than 100,000 in all - to the theatre for the first time. They came from community centres, village clubs, old-age homes, trades unions. Many were handicapped. They paid £2, £3, £5, and only latterly £7, a head. This bounty also benefited other theatres and arts institutions.

The letters of thanks I received testify movingly to the lift in spirit he gave them. A private individual, of vision and imagination, showed us as a community what needed, what still needs, to be done.